Bitcoin rebounded above $66,000 from its June 30 low near $58,500, but market positioning signals remain mixed as options skew widened and perpetual funding turned positive, suggesting fear and leverage are rebuilding before a potential sustained recovery.
Options traders are paying steep premiums for downside protection. The options skew, a measure of the relative cost of put options versus call options, widened to 11.4 percentage points as of July 22, up from 9.8 percentage points one month earlier. According to VanEck’s historical analysis, this 11.4 reading ranks in the 83rd percentile since 2021, indicating elevated fear levels.
One-month put volatility stands at 46.9%, compared to 35.5% for call volatility. This asymmetry reflects demand for downside hedges. VanEck’s data on skew readings between 10 and 15 percentage points shows mixed forward returns: a median 30-day return of 1.4%, a negative 90-day median of -8.8%, a positive 180-day median of 15.3%, and a negative 365-day median of -19.1%.
Perpetual futures funding has turned positive at 4.5% annualized, a shift from the negative funding environment that persisted through spring. This reversal signals that leveraged long positions are rebuilding after traders exited during the downturn.
Dip Buyers Underwater
Traders who entered long positions during the April 13 to May 23 period, when perpetual funding ran negative and dip buying appeared attractive, did so at an average price of $77,900. At current levels near $66,000, those positions are approximately 20% underwater.
Spot volume has averaged $5.1 billion daily, below longer-term norms. US-traded spot Bitcoin exchange-traded products have shed roughly 40,010 BTC over the past 30 days, indicating institutional outflows during the recovery phase.
Fed Meeting Ahead
The Federal Reserve is scheduled to hold a policy meeting on July 28 and 29. A Reuters poll of 104 economists conducted July 17 to 21 found unanimous expectation that the central bank will hold rates at 3.50% to 3.75%.
